(1) The authority shall not receive any direct state general fund appropriation. (2) Initial funding for the authority shall be determined by the Governor and the secretary of the Finance and Administration Cabinet. Funding methods may include, but not be limi ted to, a loan from an existing state agency or agencies to the authority. The maximum amount borrowed from all state agencies shall not exceed seven million dollars ($7,000,000), to be repaid over a period not to exceed ten (10) years from the original lo an date. The Governor shall have the authority to provide or secure additional funding necessary to maintain, for the first thirty -six (36) months of its operation, the surplus the Governor deems proper. The additional funding may come from any funds which may be expended directly by the Governor or from nonstate -agency sources and, regardless of source, shall be a loan to the authority. The rate of interest to be applied to the loan shall be one percent (1%) higher than the average for the long-term investment folder of the lending agency on the anniversary date of the original loan. The interest rate shall be adjusted annually on the anniversary date of the original loan. To minimize cash requirements and interest obligations, the loan shall be executed as a line of credit against the lending agency, so that only those funds actually required for initial start -up operations, including the establishment of a surplus and reinsurance expenses, are drawn down on an "as needed" basis. (3) Any executive branch ag ency of the Commonwealth and any public corporation created by the Commonwealth, any statute to the contrary notwithstanding, may lend money to the authority subject to the terms and conditions of this section, and any loan made pursuant to this section sh all not be construed as a breach or violation of fiduciary duties contained in KRS Chapter 386. (4) Funds collected by the authority shall not: (a) Be loaned to the Commonwealth or any instrumentality or agency thereof; (b) Be subject to transfer to the Co mmonwealth or any agency or instrumentality thereof, except for repayment of the loan authorized in subsections (2) and (3) of this section; or (c) Be expended for any other purposes than as authorized by KRS 342.801 to 342.843 and KRS 304.13-340.
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